PARLE Hide and Seek (Demand & Supply Analysis) PARLE Hide and Seek (Demand & Supply

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PARLE Hide and Seek

DEMAND & SUPPLY ANALYSIS

HISTORY: PARLE COMPANY

In 1929 a small company by the name of Parle products emerged in British dominated India. The intent was to spread joy and cheer to children and adults alike, all over the country with its sweets and candies. The company knew that it wouldnt be an easy task, but they decided to take the brave step. A small factory was set up in the suburbs of Mumbai, to manufacture sweets and toffees. A decade later it was upgraded to manufacture biscuits as well. Since then, the Parle name has grown in all directions, won international fame and has been sweetening people's lives all over India and abroad. Apart from the factories in Mumbai and Bangalore Parle also have factories in Bahadurgarh in Haryana and Neemrana in Rajasthan, which are the largest biscuit and confectionery plants in the country. Additionally, Parle Products also has 7 manufacturing units and 51 manufacturing units on contract.

DETERMINANTS OF DEMAND OF HIDE AND SEEK

Price: The product is popular in middle and upper middle class and it has a very good taste so we can say that if we see a rise in price of product then there will be a slight decrease in the demand of product, but if there is a decrease in the price, the demand of the product may slightly increase. Income: If the income of the people increases, the demand of the product may slightly increase or may not increase but if the income of the people decreases, the demand of the product may decrease or may not decrease because the product comes in different quantities like Rs. 5, Rs. 8, and Rs. 14. Population & Age group: This product is mainly consumed by Teens, Tweens, Adults and DINKS therefore the age group does not affect the demand of the product and by the increase in the population the demand of the product also increases. Brand Image: The brand image of the Parle plays an important role in the demand of the Hide & Seek. This product has built such a brand image that it has much attracted the mind of the consumers so they will not like to switch over to the other brand. Consumers taste and preferences: Hide & Seek comes with a mix of ingredients like Wheat Flour, Chocolate Chips, and Cocoa butter with a unique taste which has remained the same and has touched the heart of the consumers. So, they will not like to go for any other product.

BRANDS Hide & Seek Britannia Good-Day Choco-Chip NO CONSUMTION 0-10 15 8 2

AGE GROUPS 10-20 20-30 14 12 10 1 11 2

ABOVE 30 12 12 1

16 14 12 10 8 6 4 2 0 0-10 10-20 20-30 ABOVE 30 AGE GROUPS Hide & Seek Britannia Good-Day Choco-Chip NO CONSUMTION

According to the above analysis it is concluded that people of different age groups prefer mostly Hide & Seek brand of biscuits while Britannia Good-Day Choc-Chip brand is almost at par with Hide & Seek among all the age groups. People of age group above 30 equally like to have both brands.

 Competition: There are many competitors like Britannia Good-Day Chocochip cookies, Sunfeast Choco, etc. in the market providing Chocolate biscuits so if the price of the competitors increases, the demand of Hide and Seek also increases. But if the price of the competitors decrease, the demand of Hide & Seek will be slightly affected by it. Price of Complementary Goods: Hide & Seek is made from the Sugar, Cocoa mass, Cocoa butter, Dextrose, Emulsifier (322), and Vanillin. If the price of these complementary goods increases then there will be slight decrease in the demand. Advertisement campaign: Advertisement campaign has played a vital role in attracting the major part of the population towards Hide & Seek. It was through this campaign like Dil aa Jaaye! Hrithik Roshan is their brand ambassador and they have used his flawless dance for promoting Hide and Seek. So, it is through advertisement that Hide & Seek has gained social acceptance which has played a major role in increasing its demand.

SHIFT IN DEMAND CURVE:

Downward Shift in Demand Curve
When the demand for product decreases due to external factors but the price of that particular product remains constant. E.g. - If the prices of Substitute goods like Britannia Good Day Choc Chips, Sunfeast Choc etc fall, the demand for Parle Hide and Seek will also fall.

Upward Shift in Demand Curve

The change in quantity demanded due to change in other factors with price remaining constant of that particular product. Eg. If the prices of Substitute goods like Britannia Good Day Choco Chips, Sunfeast choco etc increase, the demand for Parle Hide and Seek will also increase.

SUPPLY ANALYSIS

SUPPLY OF PARLE HIDE & SEEK

What Does Law Of Supply Mean? A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services offered by suppliers increases and vice versa.

DETERMINANTS OF SUPPLY

Technology
A supply curve is drawn for a given technology. Better technology shifts the supply curve to the right. Producers supply more than previously at each price. For instance Better cocoa refining reduces the cost of making chocolate biscuits.

 Faster shipping and better refrigeration lead to less wastage in spoiled cocoa beans. Technological advancement enables firms to supply more at each price. As a determinant of supply, technology must be interpreted broadly. It embraces all know how about production methods, not merely the state of available machinery. In agriculture, the development of diseaseresistant seeds is a technological advance. Improved weather forecasting might enable better timing of planting and harvesting. A technological advancement is any idea that allows more output from the same inputs as before. A technological advancement shifts the production possibility frontier outwards. Price of Input A particular supply curve is drawn for a given level of input prices. Lower input prices (lower wages and lower fuel costs) induce firms to supply more output at each price, shifting the supply curve to the right. Higher input prices make production less attractive and shift the supply curve to the left. If a late frost destroys much of the cocoa crop, scarcity will bid up the price of cocoa beans. Choco-chip Biscuits producers supply less biscuits at same price than previously.

Government Regulation
Once people have discovered a better production method they are unlikely subsequently to forget it. Government regulations can sometimes be viewed as imposing a technological change that is adverse

for producers. If so, the effect of regulations will be to shift the supply curve to the left, reducing quantity supplied at same price. More stringent safety regulations prevent chocolate biscuit producers using the most productive process because it is quite dangerous to workers. Whenever regulations prevent producers from selecting the production methods they would otherwise have chosen, the effect of regulations is to shift the supply curve to the left.

SHIFT IN SUPPLY CURVE:

In simple words the shift in the supply curve refers to the change in quantity supplied due to the other factors other than price. Downward shift (shift to right) and upward shift (shift to left) are the two shifts in the supply curve.

Downward shift (shift to right):

When the supplier is able to supply more products without a change in price it is called as downward shift or shift to right. E.g. Due to introduction of new cost-effective technology, the production of Parle Hide & Seek Packets will increase.

Upward Shift (Shift to Left):

When the supplier is able to supply less without changing the price of the product is called as upward shift or shift to left. E.g. if in any year the agricultural production of cocoa crops get damaged due to bad weather then there will be less supply of Choc products at same price and same with hide and seek.

ELASTICITY ANALYSIS

PRICE ELASTICITY
Our product has a unique taste so if we increase our price by 25% then demand of our product will decrease by 5% that means elasticity of price is <1. So, our product is less elastic. (If we increase the price by Rs. 1 then demand will fall by 5 pc per 100 pc)

[Our Products price elasticity is <1 because our product is in monopolistic market]

Arc Price Elasticity:

INCOME ELASTICITY
If the income rises by 20% then the demand will rise by 14 %( approx) the curve is positively sloped means that elasticity of Income is >0 and <1.

8 INCOME IN THOUSANDS 7 6 5 4 3 2 1 30 40 50 60 70 80 90 100 110 QUANTITY DEMANDED

= 0.71

Arc Income Elasticity:

= 0.73

CROSS ELASTICITY OF DEMAND

If there is an increase in the price of Britannia Good Day Choc Chips or Sunfeast Choc by 20% to 25% then the demand for Parle Hide & Seek will increase by 8%. (When there is an increase of Rs.1 in the substitutes price then the demand of the Hide & Seek will increase by 10% approx)

= 0.51

Arc cross- price elasticity:

= 0.53

Cross Elasticity for Complementary Goods:

If the price of the cocoa butter, wheat flour and other complementary goods like plastic packaging materials will increase constantly than the cost of the production will increase and by this the price of the relevant product will also increase but the demand of hide & seek will remain constant because of it is a normal good.

Short run and long run impact in the elasticity of the demand In the Short run period of time, the demand for hide & seek is less
elastic because if the price of hide & seek biscuit suddenly increases Rs.5 to Rs.8, than the demand of the product will also decrease but in the long run the demand may not be much affected.

There are some criteria that also affects and they are like:
Our product should be in the monopolistic competitive market. No change in the taste and quality.

In the Long run period of time, the demand for the hide & seek is
more elastic because if the price of the hide & seek in the 2005 was Rs.5 and in the 2010 it will be Rs.10 and, the quantity and the quality will remain the same and the other products like Britannia good day Choc chips, Sunfeast Choc etc. if they dont change any of the things like price, quality and quantity then it will greatly affect the demand of the hide & seek and it will started decreasing day by day.

Assumptions:
There are possibilities of change in technology & chances of Product innovation in the long run. There are possibilities of increasing good quality biscuits manufacturing units.

CONCLUSION
As Parle Hide & Seek is an elastic product, a slight increase in its price could greatly affect the consumers buying decision as they would then prefer to purchase its substitutes such as Britannia good day choco chips, sunfeast choco etc.

BIBLIOGRAPHY

www.parle.com www.britannia.com www.itcportal.com